Search Documents

INTRODUCTION In the preceding chapters we have discussed the various elements of mineral economic analysis, their interrelationships, and the most accepted and advanced techniques by which these elements are manipulated to provide the decision maker quantitative measurements for judging alternate investment opportunities. Regardless of how carefully the economic evaluation is made, and how comprehensive the study of economic parameters has been, uncertainty still remains a significant factor in the outcome of the analysis. The investor or money manager is acutely aware of the uncertainty factor. Many of the economic parameters are functions of economic forecasts and value estimates that can- not be known with any degree of certainty. The postulated DCF-ROR is based upon certain estimates representing "best guess" values, and a single point parameter DCF-ROR analysis represents a combination of "best guesses." The wise decision maker looks at such an analysis and asks the "what if" questions. What if the production cost is 10% higher than the estimate? What if there is an overrun in construction costs? What if the mineral price falls lower than expected? What will be the effect of a higher royalty rate? Many more such questions may arise in trying to assess the total risk involved in funding a mineral project. Prior to the advent of the computer it was difficult to answer all such anticipated questions because of the many laborious calculations involved. Now, with the aid of the computer, most of these questions can be answered by the analyst at the same time the original computations are made by using the process of sensitivity analysis. Sensitivity analysis shows the effect of critical parameter changes upon the DCF-ROR or other profitability measure. When probability of occurrence can be associated with the various parameter value levels, sensitivity analysis becomes probabilistic analysis, and the risk factor can be quantitized in terms of total probability. SENSITIVITY ANALYSIS The determination of the sensitivity of the profitability index (usually the DCF-ROR) to changes in the various economic parameters, taking them one at a time, is called sensitivity analysis. The analysis may be performed for any number of parameters involved in the DCF-ROR computation. Generally, in mineral evaluations the most sensitive and most tested parameters are: the metal or mineral price, the operating cost, the annual production grade, and the initial capital invest-

Jan 1, 1980

By W. P. Diamond, J. R. Levine

The explosion hazard of methane-air mixtures has become an increasingly serious mine planning problem, and an advance assessment of methane gas potential can therefore be essential for a safe and economic mine development pro- gram. As part of its coal mine health and safety program, the Bureau of Mines has developed a simple, inexpensive test to measure the methane content of coal samples obtained from exploration cores. The gas content of coal per unit weight as determined by the direct method test can be used as a basis for a preliminary estimate of mine ventilation requirements, and to determine if degasification of the coalbed in advance of mining should be considered. Since the Bureau began measuring the gas content of coal samples in 1972, experience has led to equipment and procedural changes, the most significant of which has been the development of a ball mill for crushing the coal sample to release the residual gas at the end of the desorption test period. This revised procedure replaces the crushing box and graphical methods described in earlier Bureau publications. The results of 583 direct method tests are summarized in tabular form. These results include data on the gas content of 125 coalbeds in 15 States.

Jan 1, 1980

By D. J. Tooker

For the next few minutes, I will be discussing a product and category that many people laughed at for years. The product is cat box filiers or commonly referred to by the brand name KITTY LITTER. This product was introduced in 1947 by Ed Lowe using the name KITTY LITTER. From 1947 to 1964 the product was sold mainly through pet shops. Starting in 1964, the grocery trade began to carry cat litters. From that point, the cate gory began a solid growth trend. Particularly in the '7O's, cat litter has experienced the same kind of explosive growth that has characterized the entire pet market. For example, in the twelve months ending 9/21/79, cat litter unit volume grew by 15% versus the previous twelve months. The basis for this explosive growth is easy to comprehend. The cat population itself is rapidly expanding, reflecting the changing life- styles of Americans. As famiiies grow smaller, there is room for a pet. As apartment and con dominim living shrinks living space, a cat fills the human need for animal companionship more efficiently. Table I illustrates current cat litter market factors and projects major trends into the future to conclude that the cat litter market will equal $205MM in 1985. With this dynamic growth defined, it was imperative that a company such as Lowe's that was totally devoted to the commodity-priced products, evaluate the opportunities for added- value product differentiation. This process was started approximately four years ago with a search for new cat litter products and other new product opportunities.

Jan 1, 1980

By Vishnu S. Gupta

A modular computer program APEX (AMAX Process Evaluation Executive), has been developed at AMAX Extractive R&D, Golden, Colorado to facilitate rapid simulation of steady state material and energy balances of existing and/or proposed metallurgical process flowsheets. Currently, APEX is being used for the design, analysis, and evaluation of several of AMAX?s Nickel, Molybdenumand Tungsten processes. A unique feature of APEX is that it allows specifications of flow rates and compositions for different solid size fractions in addition to aqueous organic and gaseous phases. Thus, a metallurgical process which may involve crushing, grinding, flotation, leaching, washing, solvent extraction, precitation and refining operations can be simulated in a single computer run using APEX. APEX requires two input data files. The first is a process data file which includes physical and thermodynamic properties of the various chemical components of interest. This data file is unique to the process under study and does not require changes for alterations in the process flowsheet. The second data file is specific to a simulation case and includes descriptions of the flowsheet, various feed streams and the process equipment's operating conditions. In addition to temperature, pressure and percent solids, calculated information for each stream includes weight and volumetric flow rates, chemical compositions, specific gravities and enthalpies of solid, liquid and gas phases. For each process equipment in the flowsheet, APEX prints its operating conditions and detailed information about the streams that enter and leave the unit. Models of several general unit operations are preprogrammed in APEX. Also, the modular design of APEX permits quick and easy additions of simulation models which are specific to new and/or unique process operations. To study process stability and optimization, APEX permits several cases of a flow-sheet to be run together. Three simulations of the Moa Bay Nickel process have been excluded to illustrate the ease and flexibility of using the APEX system.

Jan 1, 1980

By Joe D. Mitzel

The Indian Head fine has been in existence since 1922. For over 56 years there have been North Dakota people mining coal at this same location. The area affected will fit inside a circle 5 km in diameter, and the coal is lignite. The seam thickness has varied from 2.4 m to 3.65m, and the overburden from 6 m to 30 m in depth. me Lignite coal which is being mined at the Indian Head Mine is from 15.8 x l0 6 to 16.7 x 10 6 J per kg; it has a moisture content of 33 to 38%; an ash content of 5 to 10%; and a sulfur content of from 0.5 to 0.7%. The moisture content and the fact that we crush the coal co a top size of 14 cm x 0, are two of the characteristics or the product which cause it to freeze and remain inside of the railroad cars on the slope sheets. The market for the coal initially was almost entirely local coal sales. That is, coal was sold to people in the area who used the lignite to heat their homes, stores, offices, schools, and churches. Back in the early 1920's, there were no stoker-fed boilers, or pulverized fuel boilers, as we have in today?s marketplace. Basically, all of the coal was sold as lump coal, pieces about 30 to 35 cm square, to be used in furnaces: and nut coal with a top size of about 7.5 cm to 10 cm to be used in the old kitchen cookstove. All of the coal fines, less than 5 cm, were screened out and layed onto a pile. There was no market for the smaller sizes of the lignite coal. It has been our experience that when the coal is in lumps or chunks larger than 7.5 cm to 10 cm, there is a very slight possibility of freezing. That is the chunks themselves freeze, but by their nature, they do not cling to one another or form large masses of frozen material which are difficult to remove from the slope sheers of the railroad cars.

Jan 1, 1980

By Donald A. Brobst

Barite, the sulfate of barium, occurs in many geological environments in sedimentary, igneous, and metamorphic rocks. The commercial deposits of barite may be classified into three major types. 1. Vein and cavity fillings that occur in rock fractures, along bedding planes, and in various solution structures. 2. Bedded deposits in which barite occurs as the principal mineral or cementing agent in stratiform bodies in sedimentary rocks. 3. Residual deposits occurring in unconsolidated material formed by the weathering of preexisting rocks. The geologic characteristics of each type of deposit are of fundamental importance to the successful search, development, and economic use of barite deposits.

Jan 1, 1980

By F. W. Bond

Predictive ground-water modeling is currently being applied to a wide range of engineering applications. In recent years models have been used to evaluate the effect of large ground-water withdrawals on regional water supplies; subsidence associated with overpumping; siting and design studies for chemical dumps; siting and safety aspects of nuclear waste storage; and heavy metal migration from disposal sites. Similar modeling techniques could be used to analyze water-related problems in the minerals industry such as mine dewatering (both open pit and underground), environmental and pollution control, and process water supply and disposal The objective of this discussion is to describe how ground-water models are being used to assist in the solution of water-related problems outside the industry and to extrapolate that use to mining problems.

Jan 1, 1980

By John Ward Smith

Dawsonite bearing oil shale of Colorado's Green River Formation offers a unique and vast (6.5 billion tons of Al2O3) resource of easily extractable alumina. The processing methods required by the thermal reactions dawsonite and its oil shale carrier also require production of shale oil, soda ash, and nahcolite as marketable coproducts. These production methods are presented. The alumina production process is contrasted with the Bayer process to describe technical advantages of extraction of alumina from oil shale which may offset the problems associated with processing a relatively lean ore. While alumina production from oil shale requires development of new technology, the technical problems appear solvable. Only the political problems arising from the now onerous and completely unnecessary Federal oil-shale withdrawal appear less solvable.

Jan 1, 1980

By Robert A. Cummings

A field inventory was made of the mineral, geologic, geothermal, and groundwater resources of three geologically recent lava fields in the desert of Oregon. The term "resource" was applied with care: a "resource" must have particular value or worth, although it need not be economically viable. The spectacular volcanic features of the area have particular scientific and general interest and thus constitute geologic resources. The mineral endowment, mostly occurrences of low unit value such as stone and cinders, in large part are not resources, due to market conditions, regulations, and other factors. These and other conclusions will be used by the Bureau of Land Management in its multiple land use planning process for the area.

Jan 1, 1980

By A. K. Kelly

Potash was first discovered in Saskatchewan in 1943 but its continuous extraction did not begin until 1962. In the years since then, potash has played an important role in the economic and political life of the province. And, as is well-known, the most eventful time in the life of the industry occurred in 1975 when the Government of Saskatchewan decided to become a major participant in potash production. To understand that decision, however, requires an understanding of the economic development of Saskatchewan and of relations between the industry and the government prior to 1975. This year, Saskatchewan celebrates its 75th year as a province. For most of those years, we have been an agrarian economy and society, dependent on exports of cereal grains, mostly wheat, for a livelihood. Even today, agriculture accounts for about 25% of the province's Gross Domestic Product (Economic Review, 1979, p. 7) and difficulties in agriculture spread rapidly to the rest of the provincial economy. The difficulties and risks that go hand in hand with being a "one crop" economy were known as long ago as 1920 but were not fully appreciated until the combination of depression and drought in the 1930's turned the prairie grain- belt into a dustbowl. Some idea of the severity of the depression is revealed by the following data: in 1928, Saskatchewan produced 321 million bushels of wheat. By 1931, the total fell to 132 million bushels and, in 1937, to a mere 37 million bushels. The value of agricultural products sold off farms fell from $273,000,000 in 1928 to a meagre $51,000,000 in 1937. The impact of such a fall of agricultural incomes was catastrophic since about 70% of the population of some 921,000 persons lived in rural, agriculture-dependent areas (Britnel.1, 1939, p. 14).

Jan 1, 1980

By G. A. Buckland

"The development, in Ontario, of a common industry-wide program for the development of skills for employees in underground hard-rock mining is described. This program is designed to increase the productivity of individual workers by improving their skill levels, while at the same time ensuring that employees are instructed in the requisite safety and health aspects of performing various underground tasks. The program's development through a management-labour-government tripartite approach is described. How this program was coordinated with new Government Regulations on Occupational Health and Safety dealing with mandatory training of underground employees is also outlined. IntroductionThis paper will describe briefly what modular training is all about and outline why, and how, it was developed in Ontario on an industry-wide basis. Simply stated, what's been accomplished to date is an industry-wide program for developing the mining skills of underground production employees.The basic objective of this program is to improve the productivity of underground workers. It involves developing an employee's skills to improve his productivity and, because working productively involves knowing how to do a job safely, the program includes instructing an employee in the various safety and health aspects of underground work. An important and, I believe, distinguishing point about the development of this program is that it has been done with the full participation, cooperation and commitment of management, labour and government.It's of considerable interest to note that companies in Ontario who are now using this program are finding that new employees are approximately six months further advanced in productivity than was the case before its use, and in some cases the frequency of accidents has shown a reduction among those employees who have taken this program as compared to those who haven't"

Jan 1, 1980

By Dan S. Nilsson

Small-scale mines are today expected to provide much of the increased production of metals, industnial minerals and coal this country demands in the future. But what is the size trend in the mining industry?

Jan 1, 1980

By Thomas J. Kingston

A general overview of the taconite crushing process at Minntac is presented The process is controlled from a central control where the control room operator uses closed circuit TV, computer process control and alarms, graphic panels, and radio communication to roving attendants to run the Plant. This paper points out the operating controls and parameters as the plant operator sees and uses them.

Jan 1, 1980

By L. A. Pursell

The case history, which is the subject of this paper, involves the expansion of a lime plant in Texas. The major new production unit is to be a 545.45 tonne per day coal fired rotary kiln. Auxiliary facilities include additional quarry haulage equipment, modifications to the crushing plant, a hydrator, storage facilities, and a loading system. The existing plant consists of a high calcium limestone quarry, two coal fired rotary and 10 gas fired shaft kilns, nth crushing, screening, stockpiling, hydrating, storing and loading facilities. The proposed modification would increase quarry volume from 545,000 tonnes per year to 805,000 tonnes per year. The plan also includes the addition of dolomitic lime to the product line which requires the purchase and handling of 186,000 tonnes of screened, washed dolomite yearly. A decision to undertake such an expansion was previously a simple and straight forward process. Such a decision now faces a major and complicating obstacle which can delay the project, raise the expected cost, or prevent it entirely.

Jan 1, 1980

By Larry G. Stolarczyk

Jan 1, 1980

By Richard E. Ellwanger

Methods of utilizing flocculants as settling and filter aids for mineral processing slurries are reviewed. Broad chemical classifications and techniques for proper dilution, multiple addition, and combination treatments are discussed. A variety of custom built and commercially available systems for make up and delivery of flocculants to the application points are in use through- out the mining industry. Those concepts which, in the author's opinion, are particularly important to the successful make up and use of flocculants are presented in relationship to the available make up and feed systems. Actual industrial applications are included in the presentation.

Jan 1, 1980

By Richard O. Rouse

Today, I want to challenge this audience by charging each of you to be a greater manager and superior engineer to manage and engineer our way through the 1980's and profitably overcome all the present and proposed government regulations. May of the present and proposed regulations will tax you and your company's management and engineering to the brink of physical and monetary exhaustion, but I believe we can succeed and coal can be America's answer to her hungry energy needs. To put our 1980's challenge into perspective, I want to give two great challenges we must overcome. First - We must improve on our process of compliance to new government regulations in the technical and equipment end of our industry. The Lord said, "Let There Be Light". MSHA said, "Let there be light in underground coal mines". Since that time, we have lived through an unmanageable and tremendously costly period of compliance.

Jan 1, 1980

By Jeffrey B. Smith

Introduction The gas shortage is going to be with us for some time to come. If we can set aside political and industry rhetoric (along with subjective personal opinions), we still are confronted by two serious "facts of life": (1) for almost a decade the U.S. has been con¬suming natural gas at a greater rate than we have been finding new reserves; and (2) there is a finite amount of natural gas present within the earth&apos;s crust. Much of the known and easily exploitable sources of gas (the so-called "conventional" sources, such as the high permeability sand reservoirs of the Tertiary sequence along the Gulf Coast) already have been developed; their production is declining rapidly. The total producible reserves from con¬ventional gas reservoirs amount to only 216 Tcf, less than an 11-year supply. However, several large potential resources of natural gas remain to be developed. These "uncon¬ventional sources" have low permeability and/or peculiar producing characteristics. The DOE program for development of these unconventional sources of gas is called the enhanced gas recovery (EGR) program. The primary goal of this program is to provide a data base of resource characterization and production technology that will lead to commercial development. DOE will encourage and support in¬dustry participation in developing and demonstrating technologies needed to reach this goal. Unconventional Resources Four major unconventional resources of gas have a high potential for commercial development. There are other unconventional sources (such as gas hydrates) that are too poorly defined to warrant a major development thrust at this time. The four unconventional sources of gas currently included in the EGR program are: 1. The carbonaceous shales of Devonian age in the Appalachian, Illinois, and Michigan sedimentary basins are the targets of the Eastern Gas Shales Project (EGSP). 2. The low permeability, low porosity so-called "tight" gas sandstones of the Upper Cretaceous/Lower Tertiary in the Rocky Mountain areas constitute the resource target for the Western Gas Sands Project (WGSP). 3. The free methane trapped in coal beds of both the eastern and western U. S. constitute the Methane from Coal Beds Project (MCBP). 4. The abnormally high pressured, high-temperature saltwater aquifers of the Texas¬Louisiana gulf coast are targets of the Geopressured Aquifer Project (GPAP). Basic implementation strategy for these EGR projects involve (1) assessing and characterizing the resource potential of the resource; (2) conducting cost-shared field testing with industry to improve, develop, and demonstrate various stimulation and production technologies; (3) coordinating EGR activities within DOE and with other federal agencies (such as the Bureau of Mines) to minimize duplication; and (4) aiming all projects toward commercial development of the gas resources. EGSP What type of "geological animal" is the EGSP dealing with? While gas undeniably is related to the occurrence of natural fracture systems within the shale, the overall producing mechanism and precise location of fractured, gas¬bearing locales within each basin is still poorly understood. By developing reliable resource characterization techniques and applying effective stimulation technologies we intend to elevate the Devonian shale from the status of a potential gas resource to that of a proven gas reserve. Once we have done this the private sector can take over the large-scale commercial development of the Devonian shale gas resource. WGSP The second largest project (both in terms of complexity and level of funding) is the WGSP. The primary targets for this project are the low permeability (< 1 md) gas sandstones of the Piceance, Uintah, and Greater Green River basins and the Northern Great Plains Province. Project success in these four primary geologic locales will permit investigating additional low permeability sandstones in 16 other sedimentary basins. It ap¬pears that the only practical means of increasing permeability and resultant flow rates from these sandstones lies in the use of massive hydraulic fracturing techniques. Unfortunately, it is still too early to design such jobs with predictable results. MCBP The MCBP is to be involved in producing and utilizing methane derived from coal beds. The coal, like portions of the Devonian shale, is impermeable, highly fractured (termed "cleat" by

Jan 1, 1980

By W. D. Riley

The U.S. Department of the Interior, Bureau of Mines, has been conducting minerals recovery research in support of the nation&apos;s geothermal program since 1974. The Bureau&apos;s program of laboratory and field studies has focused on determining the materials of construction for geothermal resource recovery plants and an the recovery of mineral values from the geobrines. An analytical program has been conducted at the Avondale Research Center to determine the chemical constituents of some high- and low-salinity geobrines found in the Imperial, Valley of California. Data are reported for the early stages of brine production of femur geothermal wells--the low-salinity, medium-enthalpy brines from the East Mesa Known Geothermal Resource Area (KGRA), Mesa 6-1 and 6-2, and the high-salinity, high-enthalpy brine from the Salton Sea KGRA, Magmamax 1 and Woolsey 1. The reported results indicate the importance of the operating and engineering history, the operating parameters during sampling, and the method of sampling in order to evaluate the chemical analyses.

Jan 1, 1980

By M. A. T. Cocquerel, M. G. Burcher, J. G. Eacott

"This paper is based on work carried out to examine the feasibility of increasing the smelting rate of two oil-fired calcine-charged reverberatory furnaces . Various constraints prevented physical enlargement of the furnaces and so allention turned to the use of preheated combustion air or oxygen enrichment to bring about the required increase in production. As a basis for further calculation, a furnace heat balance is determined using the smelting metallurgy and combustion data for the current operation. Various other operational data are tabulated and compared with similar data from other operating copper smelters.New heat balances are derived for various levels of combustion air preheat at the current smelting rate, and the effects of air preheat on oil consumption, combustion air and waste gas volumes are tabulated. These data are used to demonstrate the level of increased throughput which would be obtained before constraints in existing gas handling equipment are encountered.A similar exercise for oxygen enrichment is set out, with oil consumption, combustion air and waste gas volumes at various enrichment levels tabulated for the current smelting rate. These data are in turn used to demon strate the smelting rate which would be achieved at a practical level of enrichment before waste heat boiler and gas handling constraints are encountered.The energy implications for both cases are summarized."

Jan 1, 1980